Bowery Savings Bank v. Nosmo Realty Corp.

Proskauer, J. The petitioner, Frederick Construction and Engineering Company, has a lien junior to a second mortgage of defendant Roth on premises 15 West Thirty-first street, which are the subject of this foreclosure action. The second mortgage covers also property on One Hundred and Seventieth street in The Bronx. The petitioner asks that the distribution of the proceeds of the Thirty-first street foreclosure in a surplus-money proceeding be stayed until he can prosecute a suit in equity to compel Roth to foreclose on the Bronx property and marshal the securities. In Quackenbush v. O’Hare (129 N. Y. 485) it was held that marshaling could be accomplished only in an action for that purpose where the whole fund resulting from the sale of all the pieces of property is under the control of the court and all the parties interested are before it. Had the petitioner seasonably begun its suit to accomplish [83] marshaling, it is possible that it might have obtained some such result. Instead, it litigated the defendants’ rights and only after the conclusion of the surplus-money proceedings and the making of a motion to confirm the referee’s report therein does it now seek in that foreclosure action to secure relief. Both as a matter of law and of discretion the motion must be denied. Order signed. ° The motion to confirm the referee’s report is granted. Settle order on notice.